NURTURE
Your Child, Future
Fund Manager
Personal funds we mean!
It’s never too early to start
children on the importance
of managing their money.
Family & Life shares four
easy methods you can use
to teach your children
about the importance of
money management.
All of us live in a consumerist culture.
You realised how impossible it is to satisfy the voracious
need for newer, shinier things.
You’ve heard people complaining about not being able to
afford what they want to buy.
You’ve read about young adults saddled with crippling
credit card debt.
1
Every day is a learning lesson
Children from as young as three can start learning
the basic elements of money and finance. When asked
where money comes from, children will most likely tell
you it “magically” comes out of an ATM, since that’s
where they see their parents withdrawing money from.
So, the next time you’re at the ATM, take the
opportunity to teach your children that the money inside
the machine is actually money that you’ve worked hard
for when you go to the office every day.
Grocery shopping can also become a fun financial
learning exercise. Teach your children how to compare
the prices of the food or beverage items they love with
other similar options, and explain how they can stretch
their dollar by making prudent choices.
2
Start saving early
Piggy banks are one of the best ways to inculcate the
habit of saving in young children. Most children cannot
grasp the idea of saving for a rainy day, so instead,
teach them to save for an item they’re coveting for.
Tailor the savings plan according to the age and
maturity of your children. For example, asking a fiveyear-old boy to save enough money for an iPad might be
a bridge too far. Ideally, the item should be attainable
within a short period of time so that your children won’t
feel that saving is a hopeless endeavour.
Be firm and tell
them you won’t
be giving them
any additional
cash. This will let
them learn how
to cope with the
consequences of
over-spending.
18
Family & Life • Nov 2013
Using a clear money jar or piggy bank is a great way of
showing your children the progress they’ve made
and also serves as a visual motivation.
Another way of encouraging your children to
save is to match cent for cent the amount they
save every day as a reward. They will feel more
motivated to save and the idea
of saving money will also be
reinforced in their young
impressionable minds.
3
The difference
between
“needs” and
“wants”
Teaching your
children the difference
between “needs” and
“wants”, which can be quite
abstract, is one of the key
Then, you wonder. Will your own children be facing
similar financial problems in the future?
Fortunately, laying the foundations of sensible money
management early can prevent your children from
falling into the trap of living beyond their means. We
collaborate with the team from MoneySENSE, the
national financial education programme for Singapore,
to share with you four ways to teach simple financial
lessons to your children.
tenets of financial management. The best time to
introduce this is when your kids are comfortable with
saving and are familiar with pricing of different items.
During the aforementioned grocery trip, you can show
your children the receipt and run through the items
purchased to explain which items are essential, such as
meat, vegetables and rice, and which are optional. Also,
take this chance to highlight discounts and weekly sales
because by doing this, your children will be taught that in
spending, they can save too, which means more money
left over in the bank.
Meals at restaurants are another effective method of
explaining “needs” and wants”. Your children should be
familiar with different food items and their price ranges
for this to work. Read the menu together with them and
point out the price of the dishes they always usually
have, such as French fries, and compare it with cheaper
places or even at home. Then, tell them you only have
a certain amount to spend on the meal and let them
work out what they would like to eat. Your children will
realise the different prices for similar items in different
locations and start making smarter choices.
4
Learning through experience
Teaching your children money management habits
isn’t just about telling them what to do, but also letting
them experience things for themselves. For example,
they can handle their own pocket money during field
trips or at school.
Another suggestion is to give them a
weekly instead of a daily allowance.
Through this, your children can
learn how to manage their money
during the five days they’re at
school. If they over-spend and
run out of money before their
next allowance, be firm and tell
them you won’t be giving them
any additional cash. This will let
them learn how to cope with the
consequences of over-spending.
MoneySENSE is a national
financial education
programme brought to you
by the MAS. To learn more
about financial planning, visit
www.moneysense.gov.sg.